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4 Customer Retention Strategies For SaaS

SaaS are often in the position where each customer who comes onboard is hard-won.

Of course you want to keep them, that’s why you’re monitoring for signs that they’re thinking of leaving and trying to proactively do something about them, but of course it’s even better if you can keep them from thinking about leaving in the first place.

This is where it’s important that your SaaS has thought through retention strategies from the start and has put a plan in place. What can you be doing to keep people interested?

4 Customer Retention Strategies For SaaS

#1. Your Value Proposition

A big part of retention is ensuring you’ve attracted the right customers in the first place. As Lincoln Murphy says;

“Good customers come from properly targeting and bringing the right audience to your marketing website or otherwise getting in front of them to sell ’em your stuff.”

Part of retaining customers is not simply scrambling when they appear to be in pre-churn status, it’s how you manage them across the entire customer lifecycle, starting from before they sign up.

How clear are you?

You should be collecting churn data and figuring out the reasons why people are leaving; how many are related to not being a good fit in the first place? One of the ways you end up with “poor fit” customers is by not having a clear value proposition to begin with.

Your customers should understand the answers to the following questions even before they sign up:

What particular problem/s do you solve?

Who do you solve them for?

What makes you better than any competitors?

You should be clear on the answers to these questions too, as well as an overall: why are we in business? There has to be a good reason, right? Why would you create a SaaS if it was just like someone else’s?

These ideas should be clear in the content you produce, in any emails a prospect might receive before signing up and in your website copy.

A good strategy is also to come up with a snappy value proposition statement which sums up your business and will interest prospects to look further. Check out Slack’s value proposition statement below:

Slack actually keeps it interesting; their base statement is “a messaging app for teams”, but every so often they will change out the kind of team they are talking about based on a current customer.

Just remember a key point here: getting the right customers happens when you are clearly able to explain the value they stand to gain from going with you.

#2. Onboarding Process

The experience the customer has with you during onboarding is crucial. Your aim is to ensure that they realize the value for which they signed up in the first place. What does success look like to them? Give them an onboarding process which invariably leads them in the right direction.

For example, Slack users will have noticed their low-touch method for onboarding new customers and ensuring they know what to do, where and how. Useronboard wrote a great piece directing people through Slack’s onboarding a couple of years ago and not a lot has changed.

Slack takes the opportunity to give people a “tour” through setup and how to use it, followed by new users being able to chat with Slackbot to finish their setup. It’s a great example of what you can do to create a good onboarding experience, but make it low-touch so you don’t need to have people on the phone with your customers talking them through.

It’s a big consideration when launching a SaaS really—what are you going to do to make onboarding easy?

Another great point to remember about onboarding was discussed in this TechCrunch article. What is your “empty state” like? Is it intuitive for users to know what to do?

“Empty state” in this case refers to the appearance of your app when a user has first signed up and has not had the chance to use it or create their own data. For example, if you look at the Slack screen shot above, would you know what to do if you were greeted with nothing but the left-hand menu and a blank screen in the middle?

As they say, a useful empty state tells you what it’s for, why you’re seeing it and how you can fill it up. This is something for your UX considerations really, what can you do to make customer life easier?

Value, value, value

One of the key things your onboarding process must do is demonstrate that value which you promised the customer before they signed up. You should ensure that you are honoring any promises made prior to signup so there are no surprises (of the bad kind) for the customer.

Just being as useful as you can on a regular basis is also a great idea. Sending out regular emails and having a posting schedule for social media should be a given, but you can’t always be in promotional mode with those or you’ll likely make customers wary.

Create content which you know your customers will want (just ask them if you’re not sure!) For example, you could create “how-to” guides, videos or slideshares. You could write blog posts, create “quick tip” images or create a knowledge base.

Just keep it relevant. If you’ve got content which really only applies to a certain customer segment, email it to the people within that segment. Train your customers to expect quality content which applies to them!

#4. Optimize for “Aha”

What?! What is “aha”? Well, if you check out the story behind Twitter and how Josh Elman helped them “growth hack” to avoid so many zombie accounts, the “aha” is that action by a user which makes them more likely to continue as a customer.

Here’s what happened for Twitter:

“It turned out that if you manually selected and followed at least 5-10 Twitter accounts in your first day on Twitter, you were much more likely to become a long term user, since you had chosen things that interested you. And if we helped someone you know follow you back, then even better. As we kept tweaking the features to focus on helping users achieve these things, our retention dramatically rose.”

If you have signed up for Twitter more recently, you’ve probably noticed they help you find accounts to follow which will be of interest to you.

Have you discovered what the “aha” is for your SaaS customers? Have you optimized to better improve their chances of getting there?

Final Thoughts

Optimizing your SaaS for retention is an opportunity which every SaaS should take. You work hard enough to get customers onboard, so it makes sense to have a plan for keeping them!

There are many strategies you can use (in fact, there are entire onboarding handbooks out there!), but we wanted to look at a few important strategies which all can use.

Attracting the right sorts of customers in the first place is a key concern for retention. Develop a clear value proposition and deliver on it. Have a thorough onboarding process, effective engagement strategies and know and optimize for your “aha.”

It takes a bit of testing, but if you’ve developed a good product, these strategies should boost your retention.